New Delhi, June 3 (IANS) Commercial vehicle industry growth is likely to moderate in the short to medium term due to elevated fuel and raw‑material prices, a report said on Wednesday.

India’s original equipment manufacturers remain optimistic about long‑term structural drivers such as replacement demand and infrastructure spending, the report from PL Capital said.

Auto dispatches in May 2026 showed sustained volume growth across most segments, though some sub‑segments moderated, the report said.

Passenger vehicles reported growth at nearly 20 per cent, while two-wheelers posted stable growth as most OEMs increased their capacity to meet sustained retail demand while mitigating labour shortages and disruptions in logistics and supply chains.

The commercial vehicle industry reported mixed performance, with subdued growth seen for MHCVs, while Light Commercial Vehicles (LCVs) continued strong momentum.

Tractors continued on a strong growth trajectory with adequate reservoir levels and resilient rural demand. However, progression of the monsoon and input cost inflation will be key monitorables, the report noted.

Another recent report said that India’s electric vehicle (EV) market registered an increase in demand during May, as higher fuel prices pushed more buyers towards battery-powered alternatives.

EV sales in May reached 6.4 per cent of passenger vehicle sales, compared with 4 per cent in FY26, while electric two-wheelers accounted for 8.9 per cent of sales, up from around 6.5 per cent last year.

The Society of Indian Automobile Manufacturers (SIAM) had earlier said that domestic passenger vehicle dispatches to dealers went up 25.4 per cent (year-on-year) to 437,312 units in April, while two-wheeler sales stood at 18,72,691 units last month, up 28.4 per cent.

The broader outlook for the passenger vehicle segment also remains positive, though growth is expected to moderate going ahead.

Meanwhile, the Federation of Automobile Dealers Associations (FADA) data showed earlier that the domestic auto retail industry opened FY27 on an exceptionally strong note, retailing a record 26,11,317 units in April, a 12.94 per cent growth.

—IANS

aar/ag